Brothel boss Gary Reiner freed from prison

Years of incarceration served for his role at Danish Health Club

KITTERY, Maine — Once a soccer dad, lawyer and town councilor, federal inmate Gary Reiner will be released from a Philadelphia prison today, the last day of his 60-month sentence for managing a brothel at the former Danish Health Club and laundering $4 million in prostitution profits.

KITTERY, Maine — Once a soccer dad, lawyer and town councilor, federal inmate Gary Reiner will be released from a Philadelphia prison today, the last day of his 60-month sentence for managing a brothel at the former Danish Health Club and laundering $4 million in prostitution profits.

Reiner, 59, was sentenced March 3, 2006, to five years in federal prison for promoting prostitution at the Kittery club, which masqueraded as a massage business, and laundering the proceeds.

According to federal authorities, he'll be released from the Philadelphia federal detention center after being granted 216 days' credit for "good conduct time." The good conduct time was earned at a rate of 54 days per year, according to the federal Bureau of Prisons.

Reiner's sentence followed his request for a single day in jail and 364 days of home confinement. Instead, federal Judge D. Brock Hornby imposed five years, a $10,000 fine and $906,000 in forfeiture penalties.

"This was an evil business. Evil for the women who worked there and evil for the morals of the town of Kittery," Hornby told Reiner. "The tragedy is that the operation would've collapsed if not for Gary Reiner. Gary Reiner held it together when he should've walked away."

Reiner, a federal jury found, managed the brothel managers, negotiated with pimps, placed explicit ads in adult magazines and literally took the proceeds to the bank. Twenty-five prostitutes were working two shifts, seven days a week when the club was raided by the Internal Revenue Service, State Police and the Federal Bureau of Investigations on June 4, 2004.

One of the prostitutes was 13 years old, though prosecutors never charged Reiner with anything having to do with the minor. According to prosecutors, the 13-year-old prostituted herself in Kittery four days a week, had sex with five to six men a day and gave the cash to pimp Lance Williams.

Another prostitute who worked for a pimp testified she had sex with an estimated 2,760 men during the 34 months she worked at the Kittery brothel and earned what federal prosecutors calculated was $745,200.

The club was managed by Russell Pallas, a former police officer for the towns of Candia, Raymond and Meredith, who pleaded guilty to his role in the conspiracy as an $800-a-week manager at the brothel where his wife, Carrie, worked as a prostitute. His firsthand testimony about managing pimps, hookers and johns, in addition to keeping detailed daily ledgers recording club finances and how many men visited which hookers, led to leniency during his sentencing.

Pallas testified during Reiner's U.S. District Court trial that men paid $70 to get in the door, and that money stayed with the club business. The club paid the prostitutes who worked there nothing, and later began charging them a $100 a week, plus $10 a day in fees.

When customers complained the women were charging too much, Reiner issued an edict saying the limit would be $150 for "full service — full sex," testified Pallas, who served six months in jail for his role in the operation.

Handyman Richard Emery testified during Reiner's trial that he first went to the Danish Health Club in the mid-1990s after hearing about it by "word of mouth."

"I wanted to see if it was true what I was hearing about it," Emery told the court. "And I found out it was."

Emery said he paid $150 cash for a sex act from a prostitute.

Mary Panagopoulos testified that she worked as a Danish Health Club prostitute for 16 years, during which time the town mandated massage licenses. She said she paid $1,200 to $1,300 for her license from a massage school, which the prosecution proved was established by a real estate partner of Reiner's and also the founder of the Vermont School of Law, from which Reiner received his law degree.

Panagopoulos said she did not attend the required 500 hours of classes for the massage license and that partial payment for the certificate she received anyway was made to a man she was instructed to meet at the former Bickford's restaurant on the Portsmouth traffic circle.

According to an affidavit by IRS special agent Rodney Giguere, the FBI began investigating interstate prostitution, crimes against children and money laundering at the Kittery brothel in October 2000, four years before it was raided and shuttered. The investigation began in Boston, according to Giguere, where members of the "Jones family" peddled narcotics, committed insurance fraud and recruited teenaged runaways to work as prostitutes, some of them at the Kittery club.

Prostitute Cheryl Stillwell testified that she taught the 13-year-old girl how to perform sex acts with adult men for cash at the Danish Health Club and was sentenced to 20 months in jail. Prosecutors said her boyfriend, Lance Williams, traded another pimp a single cigarette for the girl's name before he drove her to the Kittery club to have sex with adult men for cash she turned over to him.

Williams wept when he was sentenced to 11½ years in jail.

Club bookkeeper Mary Ann Manzoli was sentenced to a year of home detention.